American Property Casualty Insurance Association
  • Staff Contact: Nicole Mahrt-Ganley     
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  • February 13, 2017
  • CFA Study on Not-At-Fault Accidents Misses the Mark…Again
  • CHICAGO, IL - The following statement by the Property Casualty Insurers Association of America (PCI) is in response to the recent study by the Consumer Federation of America (CFA) regarding auto insurance rating. The following statement can be attributed to David Snyder, PCI’s vice president of policy development and research.

    “The CFA’s latest study on auto insurance pricing is flawed and misleading. The central flaw in the report is that it fails to take into account that all the rating and underwriting factors insurers use are proven to increase the accuracy of predicting the risk of loss.

    “The most glaring errors in the study involve the driver profile assumptions that are used to gather results. The CFA did not use the same risk profile to compare the moderate income driver to the higher income driver. The CFA used no prior insurance for the moderate income driver, while using three years with the same insurer for the higher income driver. Prior auto insurance is a commonly used rating factor that is highly predictive of future loss. The skewed profiles call into question the findings and conclusions of the CFA.

    “The report also fails to take into account the wide variety of state laws that address what is considered an at-fault accident. There is also variation in how individual companies address at-fault accidents based on the facts of each incident, the numbers of incidents, specific company policies and state laws. Consumers should check with an insurer before assuming what effect an at-fault accident may have on rates.

    “Consumers should be assured that auto insurance pricing is closely scrutinized by state insurance regulators and it is subject to rigorous actuarial standards which ensures that all rating factors comply with the law. If a consumer is not happy with an insurance quote or the cost of insurance, the auto insurance market is highly competitive and consumers have a large variety of choices.

  • PCI promotes and protects the viability of a competitive private insurance market for the benefit of consumers and insurers. PCI is composed of nearly 1,000 member companies, representing the broadest cross section of insurers of any national trade association. PCI members write $202 billion in annual premium, 35 percent of the nation's property casualty insurance. Member companies write 42 percent of the U.S. automobile insurance market, 27 percent of the homeowners market, 33 percent of the commercial property and liability market and 34 percent of the private workers compensation market.
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